Strange case - any charge of violating Customs Act would arise only when somebody files a B/E for import of goods - CC to issue instructions to field formations
THE case relates to an alleged fraudulent import of Sodium Sulphate. Since the documents accompanying the consignment showed the appellant as the consignee, action was initiated.
The Directorate of Revenue Intelligence questioned the ‘appellant'. In his statement, the appellant said that they had not imported the consignment; they had not filed any bill of entry; that although they had initially consented to import the goods, they changed their mind and informed the foreign supplier in writing that they did not want it; they also did not have any IEC code at that point of time.
Nevertheless, a show-cause notice was issued to the appellant proposing to impose penalties for lending their IEC code to somebody else.
Someone had to be crucified, it appears, and so the appellant was imposed with a penalty of Rs.6 lakhs. Neither the adjudicating authority nor the lower appellate authority was ready to listen to the appellant's plea that they had not filed any documents (B/E) in respect of the alleged consignment or had claimed themselves to be the importer of the goods.
The appellant narrated the facts and the Bench observed -
"6.1 We find that the issue involved in the present case is very strange one. Any charge of violating the provisions of Customs Act would arise only when somebody files a bill of entry for import of the goods and claims himself to be the importer. In the present case as is evidenced from the records no bill of entry has been filed and, therefore, violating the provisions of Section 111(m) of Customs Act would not arise at all. Secondly, the appellant did not have the IEC code at the time of importation; therefore, lending of IEC code to anyone else also would not arise. Consequently, there cannot be any violation of Rules 7 & 11 of the Foreign Trade (Regulations) Rules attracting the provisions of section 111(d) of the Customs Act.
6.2 We do not understand how in such a scenario can the customs authorities proceed against the appellant and impose penalty when no cause of action has arisen. The said action is clearly unsustainable in law. Accordingly, we set aside the impugned order imposing penalty on the appellant."
After allowing the appeal, the Bench wanted something more to be done in the matter.
The CESTAT, therefore, marked a copy to the Chief Commissioner of Customs, Mumbai for issue of necessary directions to the field formations so that such instances are not repeated in future.
DDT will try to carry a copy of those 'directions' if and when issued.